Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ----
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
    Act Rules Bills
    Determination of cost of specified transfers u/s 49 - the transfer of an asset, being the asset held...
    Act Rules Bills
    Determination of cost of specified transfers u/s 49 - Transfer in casa of Land Pooling Scheme cover...
    Act Rules Bills
    Determination of cost of specified transfers u/s 49 - transfer of land or building under a specified...
    Act Rules Bills
    Determination of cost of specified transfers u/s 49 - in case of conversion of preference shares of ...
    Act Rules Bills
    Determination of cost of specified transfers u/s 49 - in case of any transfer by a unit holder of a ...
    Act Rules Bills
    Determination of cost of specified transfers u/s 49 - any transfer in a demerger, of a capital asset...
    Act Rules Bills
    Mode of computation Capital Gains u/s 48 - Indexed Cost - Cost Inflation Index - reference of 1st d...
    Act Rules Bills
    Mode of computation Capital Gains u/s 48 - full value of consideration - in case of an assessee bein...
    Act Rules Bills
    Capital Gains - conversion of preference shares of a company into equity shares of that company shal...
    Act Rules Bills
    Capital Gains - transfer made outside India of a capital asset being rupee denominated bond of India...
    Act Rules Bills
    Capital Gain - date of transfer of land or building under a specified agreement (e.f. Joint Developm...
    Act Rules Bills
    Deemed profit u/s 44AD - existing rate of deemed total income of 8% reduced to 6% in case of total t...
    Act Rules Bills
    Threshold limit for getting books of accounts audited u/s 44AB - Limit enhanced from 1 Crore Rupees ...
    Act Rules Bills
    Threshold limit for maintenance of books of accounts in case of individuals and HUF - Monetary limit...
    Act Rules Bills
    Interest Income on the bad or doubtful debts not to be taxed on accrual of income basis - co-operati...
    Act Rules Bills
    Payment of Interest to Co-operative Banks shall be allowed on actual payment basis as is allowed in ...
    Act Rules Bills
    Change in the Definition of Actual Cost in respect of Capital Assets in respect of which deduction o...
    Act Rules Bills
    Capital expenditure - Change in the Definition of Actual Cost u/s 43(1) - Disallowance of depreciati...
    Act Rules Bills
    Restriction on payment Specified persons u/s 40A(2) - specified domestic transaction which were subj...
    Act Rules Bills
    Restriction on payment of expenditure in Cash u/s 40A(3) - Cash payment in excess of ₹ 10,000 ...
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

Notes
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
Act Rules Bills
Show AI Summary
Deemed cost of acquisition set as fair market value where accreted income is taxed under Chapter XIIEB.
Where capital gain arises from transfer of an asset held by a trust or institution for which accreted income has been computed and tax paid under Chapter XIIEB, the cost of acquisition of that asset shall be deemed to be the fair market value taken into account for computing accreted income as on the specified date referred to in sub section (2) of section 115TD.
Act Rules Bills
Show AI Summary
Cost of acquisition tied to stamp duty value for land pooling allotments determining capital gains computation.
Where capital gains arise from transfer of a specified capital asset received under the Andhra Pradesh Capital City Land Pooling Scheme and transferred after two years from the end of the financial year in which possession was handed over, the cost of acquisition shall be deemed to be the stamp duty value of the asset as on the last day of the second financial year after the end of the financial year when possession was handed over; the amendment also defines "stamp duty value."
Act Rules Bills
Show AI Summary
Cost of acquisition set as deemed full value of consideration for project-share transfers under development agreements, effective 2018-19.
The amendment provides that the cost of acquisition of a share in a project consisting of land or building, given as consideration under specified agreements (for example, joint development agreements), shall be the amount deemed as the full value of consideration under the related provision, subject to the proviso excluding certain capital assets, and applies prospectively from the effective date for subsequent assessment years.
Act Rules Bills
Show AI Summary
Deemed cost of acquisition: equity received on conversion of preference shares treated as costing the original preference shares.
A new deeming provision treats the cost of acquisition of equity shares received in consideration of a transfer under clause (xb) of section 47 as the cost of the preference shares in relation to which those equity shares are acquired, thereby carrying over the preference share cost for computing capital gains.
Act Rules Bills
Show AI Summary
Cost of acquisition rule: consolidated-plan unit transfers deemed to carry forward cost from consolidating-plan units, affecting capital gains.
The amendment deems the cost of acquisition of a capital asset comprising unit(s) in a consolidated mutual fund plan to be the cost of acquisition of the corresponding unit(s) in the consolidating plan when the consolidated units were obtained by a specified transfer, thereby fixing the cost basis for capital gains computation.
Act Rules Bills
Show AI Summary
Cost basis for demerger transfers: previous owner's acquisition cost to determine transferee's cost for share transfers.
Where shares in an Indian company are transferred in a demerger, the transferee's cost of acquisition shall be the cost for which the previous owner acquired those shares, increased by any cost of improvements, by virtue of the Clause 25 amendment; the change takes effect from 1 April 2018 and applies to assessment year 2018-19 onward.
Act Rules Bills
Show AI Summary
Indexed cost base changed for capital gains computation, altering base-year reference and effective assessment period.
Amendment revises the benchmark year used in the computation of the indexed cost of acquisition by replacing the earlier base-year reference with a more recent base year, with consequential changes to the mode of computation and prospective application to the stated assessment year and subsequent years, thereby altering the use of the Cost Inflation Index in proportionately adjusting cost of acquisition for capital gains.
Act Rules Bills
Show AI Summary
Capital gains computation: rupee appreciation on redemption of rupee bonds held by non-residents excluded from full value.
Amendment clarifies that for a non-resident holder of a rupee-denominated bond of an Indian company, any gain arising from appreciation of the rupee against a foreign currency at redemption shall be ignored in computing the full value of consideration for capital gains; the change substitutes "held by" for "subscribed by" and operates prospectively from the notified effective date.
Act Rules Bills
Show AI Summary
Conversion of preference shares into equity not treated as transfer, changing capital gains treatment from assessment year 2018-19.
The Finance Bill, 2017 adds a new clause excluding conversion of preference shares into equity of the same company from the definition of transfer for capital gains purposes. This amendment, aligning preference-share conversion with existing non-transfer treatment for bond or debenture conversions, takes effect from 1 April 2018 and applies to assessment year 2018-19 onward.
Act Rules Bills
Show AI Summary
Capital gains exemption for non resident rupee bonds: transfers outside India between non residents not treated as transfer.
The Bill inserts a provision that any transfer made outside India of a capital asset consisting of a rupee denominated bond of an Indian company issued outside India, where both transferor and transferee are non residents, shall not be regarded as transfer for capital gains purposes; this change complements existing non recognition for conversion of bonds into shares and applies prospectively from the operative year specified in the Bill.
Act Rules Bills
Show AI Summary
Capital gains timing under specified development agreements: tax charged when project completion certificate is issued, using stamp duty value.
Section 45 is amended by inserting section 45(5A) to tax capital gains of individuals and HUFs from transfers of land or building under specified agreements in the previous year when the competent authority issues the project completion certificate; the stamp duty value of the assessee's share on that date, increased by any cash consideration, is deemed the full value of consideration. If the assessee transfers the share on or before that certificate date, capital gains are taxable in the year of that transfer and general provisions (excluding section 45(5A)) apply to determine full value. The amendment defines key terms and takes effect from 1 April 2018.
Act Rules Bills
Show AI Summary
Deemed profit rule change - lower presumptive rate for receipts received through banking channels, other receipts remain at higher rate.
Amendment inserts a proviso reducing the deemed total income rate under the presumptive taxation regime for the portion of turnover or gross receipts received by account payee cheque, account payee bank draft or electronic clearing through a bank account during the previous year or by the return due date; the original rate continues to apply to receipts received by other modes. The change takes effect from the fiscal start date and applies to the specified assessment year and subsequent years.
Act Rules Bills
Show AI Summary
Audit threshold increase for presumptive taxation reduces audit applicability where turnover does not exceed prescribed limit.
A proviso to the tax audit requirement exempts persons who declare profits under the presumptive taxation scheme and whose total sales, turnover or gross receipts do not exceed the revised turnover ceiling, thereby narrowing the class required to obtain an audit when they comply with sub section (1) of the presumptive taxation provision. The amendment is effective from 1 April 2017 for the relevant assessment year and subsequent years.
Act Rules Bills
Show AI Summary
Maintenance of books obligation raised for individuals and HUFs, reducing the number required to keep accounts under tax law.
The amendment raises the monetary thresholds triggering the maintenance of books and documents for individuals and Hindu undivided families: income threshold increased from one lakh twenty thousand rupees to two lakh fifty thousand rupees, and total sales/turnover/gross receipts threshold increased from ten lakh rupees to twenty five lakh rupees; the change applies from 1 April 2018 for assessment year 2018 19 and onward.
Act Rules Bills
Show AI Summary
Interest income recognition on bad debts: cooperative banks aligned with accrual-or-receipt tax treatment for recovered interest.
Amendment extends the rule that interest on certain bad or doubtful debts is taxable in the year it is credited to profit and loss or actually received, whichever is earlier, to co-operative banks while excluding primary agricultural credit societies and primary co-operative agricultural and rural development banks; it also adds in-section definitions of those terms and specifies a prospective operative date applying to the indicated assessment year and subsequent years.
Act Rules Bills
Show AI Summary
Deductibility of interest: interest on co-operative bank borrowings allowed only on actual payment, with specified exclusions.
Interest on loans or advances from co-operative banks will be allowable as a deduction only if actually paid on or before the due date of filing the return for the relevant previous year; exclusions apply to primary agricultural credit societies and primary co-operative agricultural and rural development banks, and statutory definitions for those terms are incorporated to define scope and application prospectively.
Act Rules Bills
Show AI Summary
Actual cost adjustment for assets subject to investment-linked deduction reduces cost by allowable depreciation, altering basis for deemed income.
The proviso to Explanation 13 provides that where a capital asset in respect of which deduction or part of deduction was allowed under section 35AD is deemed to be the assessee's income under sub section (7B), the asset's actual cost shall be the actual cost reduced by an amount equal to depreciation calculated at the rate in force that would have been allowable had the asset been used for business since acquisition.
Act Rules Bills
Show AI Summary
Restriction on cash payments for capital expenditure conditions recognition of actual cost and depreciation claims on payment mode compliance.
Amendment adds a proviso to section 43(1) that excludes from the actual cost for depreciation any expenditure on acquisition of an asset where payments to a person in a day exceed a specified cash threshold unless made by account-payee cheque, account-payee bank draft or electronic clearing system through a bank account, thereby conditioning depreciation eligibility on permitted modes of payment.
Act Rules Bills
Show AI Summary
Restriction on deduction for specified domestic transactions removes arm's length deduction and subjects payments to disallowance rules.
The Finance Bill 2017 amends section 40A to withdraw automatic deductibility for payments under specified domestic transactions made at Arm's Length Price; such payments are now subject to the disallowance rules of section 40A(2). The amendment also alters the proviso to clause (a) of sub section (2) consequential to the transfer pricing provision, aligning domestic specified transaction treatment with the transfer pricing framework and applying retrospectively as provided in the Bill.
Act Rules Bills
Show AI Summary
Restriction on cash payments: non banked payments above the prescribed limit are nondeductible and may be taxable.
Amendment lowers the cash payment threshold for deductibility from twenty thousand rupees to ten thousand rupees per person per day and requires payments above that limit to be made by account payee cheque, account payee bank draft, or electronic clearing through a bank account; amounts paid otherwise will be disallowed as deductions or deemed to be profits and gains of business or profession. Consequential changes to related sub provisions are also proposed, effective 1 April 2018 for the relevant assessment year.

TMI Notes

Back

All TMI Notes

Showing Results for :
Reset Filters
No Records Found

TMI Notes

Back

All TMI Notes

whatsapp Join Channel
Showing Results for : Reset Filters

Comparison of Section 143 "Special provisions in respect of certain undertakings in North-Eastern States." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

3 September, 2025

Contents
Acts
Rules & Regulations
Summary
Note

Note

-

Bookmark

Print

Print

Section 143 Special provisions in respect of certain undertakings in North-Eastern States.

Income-tax Act, 2025

At a Glance

This document is the Bill version titled "Clause 143" within the Income Tax Bill, 2025 (old version). It provides special tax relief for specified undertakings in North-Eastern States by allowing a 100% deduction of profits and gains from eligible businesses for ten consecutive tax years starting from the initial tax year. It matters to taxpayers operating eligible businesses/units in the specified North-Eastern States and to the tax administration. Effective date or enactment date: Not stated in the document.

Background & Scope

Statutory hooks: Clause 143 (Bill) proposes a special deduction in respect of profits and gains of certain undertakings in the North-Eastern States. The provision references other statutory provisions - notably section 140(4), (5) and (6) (for re-establishment/reconstruction) and the second proviso to section 80-IB(4) of the Income-tax Act, 1961 - for interaction and limiting rules. Coverage: manufacturing/production of "eligible article or thing", substantial expansion of such manufacture/production, and carrying on specified "eligible business". Definitions provided in the clause include "eligible article or thing", "eligible business", "initial tax year", "North-Eastern States" (list of eight states), and "substantial expansion". The clause sets eligibility conditions and prescribes exclusivity of this deduction vis-`a-vis other Chapter deductions.

Statutory Provision Mode

Text & Scope

The clause allows, where gross total income includes profits and gains from a qualifying undertaking carrying on an eligible activity, a deduction equal to 100% of such profits and gains for ten consecutive tax years commencing with the "initial tax year". The clause applies only to undertakings which have, during the period beginning 1 April 2007 and ending with 1 April 2017, begun or begin in any of the specified North-Eastern States to-(a) manufacture/produce an eligible article/thing; (b) undertake substantial expansion to manufacture/produce an eligible article/thing; and (c) carry on an eligible business. The clause imposes pre-conditions on formation: the undertaking must not be formed by splitting up or reconstruction of an existing business; it must not be formed by transfer to a new business of previously used plant/machinery; an express exception to the first condition exists for re-establishment/reconstruction/revival in the circumstances set out in section 140(4).

Interpretation

The clause achieves its purpose by setting an unconditional quantitative benefit (100% deduction) subject to temporal, geographic and formation criteria. The text indicates legislative intent to incentivise industrial and service activity in the North-Eastern States for undertakings started in a discrete historical window (2007-2017). The reference to section 140(4) suggests Parliament intended to align the relief with pre-existing rules governing re-established undertakings, preventing arbitrary exclusion. The exclusivity clause (no deduction under any other section of this Chapter in relation to the profits and gains) evinces an intent to avoid double counting of deductions within the same Chapter.

Exceptions/Provisos

Carve-outs and conditions in the clause include:

  • Ineligibility where formation is by splitting up or reconstruction of an existing business (subject to the section 140(4) exception).
  • Ineligibility if formed by transferring previously used plant/machinery to new business (with application of section 140(5) and (6)).
  • Exclusion of certain articles: tobacco and manufactured tobacco substitutes (Ch. 24), pan masala (Ch. 21), plastic carry bags under 20 microns (Ministry of Environment notifications cited), and petroleum products (Ch. 27) produced by refineries.
  • Eligible businesses list excludes lower-tier hotels (below two-star), sets capacity thresholds (nursing homes >=25 beds), and prescribes scope for training institutes and IT hardware manufacturing among other items.
  • Aggregate limit: no deduction under this clause or under the second proviso to section 80-IB(4) of the Income-tax Act, 1961 shall together exceed ten tax years.

Illustrations

  • Example 1: A new two-star hotel in Assam commencing operations in the initial tax year within the specified period would, subject to meeting formation and other conditions, be entitled to claim a 100% deduction of profits for ten consecutive tax years starting that initial tax year. (Facts such as dates or compliance procedures: Not stated in the document.)
  • Example 2: An information-technology hardware manufacturer in Manipur that undertakes a "substantial expansion" (as defined: >=25% increase in plant & machinery book value measured on the first day of that tax year) within the qualifying period would begin the ten-year deduction period from the "initial tax year" defined as the tax year in which substantial expansion is completed.

Interplay

The clause expressly invokes sections 140(4)-(6) for treatment of certain formational exceptions and re-established entities, and it cross-refers to the second proviso to section 80-IB(4) of the Income-tax Act, 1961 for aggregate duration limits. No other Rules/Notifications/Circulars are cited in the clause text. Potential interpretive issues (from the text): the precise effect of the cross-reference to section 140 provisions and operationalising the ten consecutive years where an undertaking previously claimed another relief are to be determined by reference to those provisions; the clause itself does not provide procedural rules for claiming the deduction. (Any administrative procedure or forms: Not stated in the document.)

Differences between the two provisions and practical impact

  • Source/status: Document 1 is presented as "Section 143 of Income-tax Act, 2025" (enacted provision); Document 2 is labelled "Clause 143 of Income Tax Bill, 2025 - Old Version" (bill text).
    • Practical impact: One is framed as enacted legislation, the other as an earlier bill text; enacted text is authoritative. (This observation is drawn from the document headings.)
  • Temporal phrase regarding the terminal date of the eligible period: Document 1 (Act) states the period as "beginning on the 1st April, 2007 and ending before the 1st April, 2017"; Document 2 (Bill) states "beginning on the 1st April, 2007 and ending with the 1st April, 2017."
    • Practical impact: The Act's "ending before" excludes 1 April 2017 as a qualifying date for undertakings that begin on that day; the Bill's "ending with" would include that day. This difference affects the eligibility of undertakings that commenced on 1 April 2017.
  • Condition/exception structure for re-established/reconstructed undertakings: Document 2 separates an explicit clause (3)(c) stating that condition (a) shall not apply to undertakings formed by re-establishment/reconstruction/revival as referred in section 140(4); Document 1 integrates that exception by parenthetical qualification in clause (3)(a) (mirroring section 140(4) language).
    • Practical impact: Substantively similar, but drafting differs-Document 2 expresses the exception as a standalone clause, which may be clearer in the bill form; the Act embeds the exception within clause (3)(a). No clear substantive divergence in eligibility is evident from the texts themselves.
  • Typographical/wording differences: Document 2 contains a typographical truncation ("bio-technolog;") and slightly different punctuation/word order in certain subsections (e.g., placement of commas and "and").
    • Practical impact: Primarily drafting/typographical; the Act text corrects such errors. Absent substantive amendments, these do not alter legal effect other than clarity.
  • Other differences: Document 1 explicitly states "Irrespective of anything contained in this Act" in subsection (6) and adds minor variations in sub-section labeling (e.g., Document 1 uses "(8) For the purposes of this section,-" then lists definitions).
    • Practical impact: Largely stylistic drafting; material coverage of deductions, duration (ten tax years), ineligibility for other chapter deductions, and the list of eligible businesses/articles remain consistent across both texts.

Practical Implications

  • Compliance and risk areas: Taxpayers must ensure strict compliance with formation criteria (no splitting/reconstruction except as allowed u/s 140(4)), substantiate that plant and machinery are new (or otherwise satisfy section 140(5)/(6) requirements) and document the date of commencement or completion of substantial expansion to establish the "initial tax year". Absent such documentation, entitlement could be contested by the tax authorities. The clause itself does not state procedural safeguards or evidence standards. (Not stated in the document.)
  • Record-keeping/evidence points: Maintain contemporaneous records evidencing commencement dates, investment in plant & machinery (book values), particulars of any reconstruction or re-establishment, and capacity thresholds (e.g., nursing home bed count). Preserve invoices and fixed asset registers to evidence the 25% increase for "substantial expansion". The clause does not set evidentiary standards or audit procedures. (Not stated in the document.)

Key Takeaways

  • The provision grants a 100% deduction of profits and gains from eligible activities in North-Eastern States for ten consecutive tax years starting from the "initial tax year".
  • Eligibility is confined to undertakings begun (or substantially expanded) within a discrete window (1 April 2007 to 1 April 2017 as per the Bill text) - timing is determinative; any variance in the terminal date materially affects eligibility for undertakings commencing on 1 April 2017.
  • Formation conditions bar benefits to undertakings formed by splitting/reconstruction or by transfer of used plant/machinery, subject to exceptions aligning with section 140 provisions.
  • Certain goods (tobacco, pan masala, specified plastic bags, refinery products) are excluded; the clause specifies a closed list of eligible businesses with capacity/quality thresholds.
  • The deduction is exclusive: no other deduction under the same Chapter can be claimed in relation to the same profits and gains; aggregate relief periods (this clause + section 80-IB(4) second proviso) cannot exceed ten tax years.
  • The Bill text contains minor drafting defects (e.g., "bio-technolog;") and differs from the Act text in a temporal phrase ("ending with" vs "ending before") and in clause structuring; such differences can have concrete eligibility consequences.
  • Procedural, evidentiary and effective date details are not provided in the Bill text. (Not stated in the document.)

Full Text:

Section 143 Special provisions in respect of certain undertakings in North-Eastern States.

Topics

Acts Income Tax